I fiddled around with VDMSound a bit, and eventually browsed the net to find a solution. I found this patch, and using that it worked. It even worked in pure xp, but without sound of course. It also turns out that the version here on Abandonia is the US floppy release (that was the only patch that worked).

Hi everybody, great site you got here. I downloaded the game and when i get to the part where the heavily bearded guy asks for the password i hit enter and the letter h comes up and then he doesnt accept it. Wondering if anybody knows what to do about that.